For most passengers, airport security is a nightmare. Is toothpaste a liquid? What if a 200ml bottle is half-filled with sun cream? Do laptops have to be removed from their cases? And why is one member of the travelling party invariably held up because something in their rucksack looks suspicious?
Boring at best, nerve-racking at worse, the whole farrago has been a feature of air transport since 9/11 turned travelling on its head.
Now, finally, things are changing, as highly sophisticated scanners are able to discern whether objects are dangerous even if they remain in passengers’ luggage.
Already in use in many US airports, the equipment is expected to be rolled out across Europe soon, easing air travel for millions, and helping airports shift many more passengers along the way.
Guildford-based DiscoverIE makes a crucial component of these scanners and business is brisk. The company last month reported an 18 per cent surge in sales to £449 million for the year to March 31, 2023, with profits rising 23 per cent to £46 million and the dividend up 6 per cent to 11.45p.
Watching brief: For most passengers, airport security is a nightmare
Chief executive Nick Jefferies also said that the new financial year had started well, with orders running above expectations.
Jefferies has run DiscoverIE since 2009. Formerly called Acal, the business was primarily known for distributing other firms’ goods.
Today, DiscoverIE designs and makes everything it sells, focusing on complex electronic components in four areas – renewable energy, transport, medical devices and automated industrial equipment. End products range from components for magnetic resonance imaging (MRI) scanners to sensors on train doors.
In each case DiscoverIE works with manufacturers, designing products for their specific needs.
That means its parts are integral to each piece of equipment and contracts tend to last many years.
Jefferies believes the future looks bright for DiscoverIE. He is keen on acquisitions too and a number of deals are in the pipeline, which should boost prospects further.
Analysts are upbeat about the business as well, forecasting further growth this year and beyond, with the dividend rising to 12.1p next year and almost 13p in 2025.
Midas verdict: Midas recommended DiscoverIE in 2014, when the shares were £2.32. It tipped them again in 2021 at £6.72, saying they should continue to gain ground. The price has since risen to £8.40 and supporters believe they should exceed £10 within the next year or two. Existing shareholders should keep the faith. Investors looking for a strong British business with a rosy long-term future could also snap up some stock.
Traded on: Main market Ticker: DSCV Contact: disoverieplc.com or 01483 544 500
